18 July – LAWFUEL – The Law News Network – Linklaters has advised Citigroup Global Markets Limited and UBS Investment Bank on the establishment by Oil Securities Limited of a programme for the issuance of up to 1 billion Oil Securities.
The Programme has been designed with the aim of providing investors with exposure to the oil market through debt securities listed on the London Stock Exchange, without any need for the purchase, or physical delivery, of oil or to trade in oil futures contracts. The Programme permits Oil Securities Ltd to issue two classes of Oil Security – one priced off the Brent oil futures contract traded on the IPE in London, and one priced off the WTI futures contract traded on NYMEX in New York. These pricings are reflected in oil contracts entered into between Oil Securities Limited and an entity within the Shell group.
The complex and innovative nature of the Programme has ensured that it is a truly groundbreaking transaction, with the opportunity for further oil companies to become involved at a later date.
Andrew Roberts, a partner in Linklaters’ London office, commented:
“We are very pleased to have been able to advise the arrangers on such an innovative transaction. Bringing a security to the market which tracks the price of a commodity such as oil is a groundbreaking achievement and has proven to be a challenging project which pushes out the boundaries of capital markets transactions.”
The Linklaters team included Andrew Roberts, Richard O’Callaghan, Simon Hood and Mathew Chandy (Capital Markets), Michael Kent and Jonathan Cater (Financial Markets), and Andrew Beverley, Dominic Markham and James Morgan (Tax).
Other counsel on the capital markets aspects of the deal included Dechert LLP and Mourant du Feu & Jeune, English and Jersey counsel respectively to Oil Securities Limited, Denton Wilde Sapte, English counsel to Shell, and Simmons & Simmons, English counsel to the Trustee.